The Act, in the first instance,
applies to all non-seasonal
factories using power and
employing ten or more persons,
and, to non-power using
manufacturing units and
establishments employing 20 or
more persons for wages and falling
within the scope of an implemented
geographical area. As of now,
employees of factories/
establishments, that
fall within the ambit of coverage,
and earning wages not exceeding Rs.
15,000/- per month are covered
under the ESI Scheme (wef 1st May
2010).

Under Section 1(5) of the ESI Act, the Appropriate Govt. is empowered to extend the Scheme to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise. Thus, a State Government may extend the provisions of the Act in consultation with the ESI Corporation, and with the approval of the Central Government, after giving six months notice of its intention in the official gazette; provided that where the provisions of this Act have been brought into force in any part of State, the said provisions shall stand extended to any such establishment or class of establishments within that part if the provisions have already been extended to similar establishments or class of establishments in another part of that State.

A
factory, or establishment once
covered under the ESI Act,
remains covered even if the
number of employees at any later
stage falls short of the
stipulated number of 10/20
employees or the manufacturing
process therein ceases to be
carried on with the aid of
power.